"Go west, young man, but look east, Ma Bell"

Jun 25, 2013

Back in the dim and distant past when beer was cheap and I was Editor of that excellent and lamented organ, Communications International, AT&T had ambitions to become a major European player with plans to move, in force, into the continent from a forward base in the UK.

I went off to interview the then CEO (in a very plush, oak-paneled office filled with beautiful and expensive models of beautiful and expensive yachts) who expounded at length on the power of the AT&T brand and how it would be leveraged to make the telco the market leader in Europe.

But it was pipe dream. Much money was spent, much PR hype was generated and many column inches were generated but, in the end it all came to naught. Now, twenty years later AT&T ihas its eyes on Europe once again.

AT&T is now the second-largest mobile operator in the US, and, pretty much like Avis and Pepsi, seems doomed forever to play second fiddle to a bigger rival as its room for competitive manoeuvre is increasingly constrained. Hence the look eastwards to the European horizons rather than at its own back yard and the looming presence of Verizon.

AT&T is rumoured to be interested in buying a significant stake (as much as 29.9 per cent) in Telefonica of Spain, but, allegedly, has been given short shrift in Madrid.

So, having been rebuffed on the banks of the Manzanares, AT&T has turned its attention to Slough (as in the John Betjeman poem "Come friendly bombs and fall on Slough! It isn't fit for humans now, there isn't grass to graze a cow...) where O2 UK (which is owned by Telefonica) is headquartered. And if that fails, the US telco can always try to get hold of some of Telefonica's Latin American assets. Hardly European, I know, and it might damage the company's relationship with America Movil of Mexico but getting into the Latin American market big time would be better than a poke in the eye with a Bell Company bakelite candlestick phone.

Elsewhere, AT&T is, by gum, said also to be looking at EE (as Everything Everywhere now calls itself) the joint venture between France Telecom and Deutsche Telekom.

Another reason for the trans-Atlantic interest is AT&T's perception that the ongoing period of financial downturn and enforced austerity in Europe will result in easy pickings now and provide hefty profits when things get better. Last month AT&T's CEO, Randall Stephenso,n told a conference that "Europe is fascinating right now, but suitable [takeover or jv] targets are hard to find."

Back at home, AT&T has never fully recovered from its abortive 2011 attempt to buy T-Mobile USA from Deutsche Telekom. Had the deal materialised, AT&T would have become the biggest network operator in the US, but the acquisition foundered on anti-trust issues and Verizon still retains the Number One spot.

Currently, in its home market, AT&T is concentrating on LTE as it tries to make up ground it has lost to Verizon, and in so doing has gained considerable expertise in the technology - expertise that it could put to good and rapid use in Europe where LTE deployment lags a long way behind the US.

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.